Value of money declining more slowly across OECD countries

INFLATION across the OECD slowed to 1.7 per cent over the year to January, coming in under the inflation targets of Japan, the US and the Eurozone.

This slower annual growth in consumer prices came from sharply reduced energy inflation, which was 1.8 per cent over the year to January, down from the 2.9 per cent pace registered in the 12 months to December.

In the US, energy prices actually moved into decline, and were down one per cent compared to during the same month a year earlier, as fracking techniques allow the shale gas revolution to go on.

By contrast in the Eurozone energy prices were up 3.9 per cent over the year, and food inflation amongst its 17 members was 3.1 per cent, dwarfing the equivalent figure for the US, which was 1.1 per cent over the year to January.

In Japan, food prices fell by 0.8 percentage points over the year, which with sliding non-food, non-energy prices led to overall deflation of 0.3 per cent. But this comes before monetary easing designed to boost inflation up to two per cent.